The British based company which set out plans to become a global pioneer in electric vehicle manufacturing has taken a step closer to insolvency after lining up a new set of advisers to oversee contingency planning, the UK’s Sky News reported.
It has learned that Arrival, which is listed on New York’s Nasdaq stock exchange, is in discussions with EY, the professional services firm, about acting as administrator if it cannot secure rescue funding.
City sources told Sky News a bid to secure long-term funding through a sale or capital injection looked unlikely to prevail.
They cautioned, however, there remained a possibility Arrival would secure enough money to survive.
It was unclear on Monday how long Arrival’s remaining cash reserves would last.
Sky News noted the company’s communications with stock market investors had been “parsimonious” with an ongoing threat of delisting hanging over it owing to delays to filing financial statements and holding an annual meeting of shareholders.
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Earlier this month, the company said it had received a further notice from Nasdaq warning that it was not in compliance with the listing rules.
The report said shares in Arrival had plummeted by more than 95% over the last year, leaving it with a market capitalisation of just over $20m.
Arrival went public in March 2021 through a combination with CIIG Merger Corp, a special purpose acquisition company (SPAC) set up by Peter Cuneo, the former Marvel chief executive.
On the day its shares began trading, it was valued at about $5.4bn (GBP4.2bn), Sky News said.
Sky News had previously reported Arrival needed at least $500m of additional funding to fund it through to breakeven.
The company was backed by blue chip global investors including BlackRock, which injected nearly $120m into the business in 2020 while Hyundai and Kia and the delivery service UPS were also early backers.